New Delhi: India has dropped eight spots to 15th position even as China overtook US and emerged as the most attractive foreign investment destination in the world, according to a foreign direct investment (FDI) Confidence Index report released on September 24.

The report, prepared by global consulting firm A T Kearney, showed that there was a 20 per cent possibility of decline in receiving FDI by India despite estimates suggesting that the country would maintain a five per cent economic growth rate and would open more sectors to foreign investors.

"The simmering conflict with Pakistan over Jammu and Kashmir undoubtedly deters foreign investment on the one hand while budget deficits and poor infrastructure have further constrained attractiveness on the other," it said.

However, AT Kearney said India's attractiveness improved significantly among non- financial services whose investment likelihood increased by 28 per cent over early 2001, the last time similar research was conducted.

Post-September 11, India's high quality and low-cost IT talents have attracted more IT-related outsourcing services, it said adding in other industries, telecom and utilities investors considered India as their 25th most attractive investment destination.

However, among investor nations, the country held its position steady among US and Japanese investors, the second and third most important investors.

PTI